India’s packaged food heavyweights ended FY25 on a softer note as inflation in key raw materials eroded profitability, underscoring the growing pressure on consumer goods companies operating across both premium and mass segments.
Parle Biscuits and Mondelez India, leaders in biscuits and chocolates respectively, reported steep drops in net profit for the year ended March 2025, even as demand for everyday packaged foods remained largely stable.
Mondelez India, which sells brands such as Cadbury, Oreo and Bournvita, saw revenue decline 9 percent to ₹12,602 crore in FY25, according to filings accessed via Tofler. Net profit, however, fell sharply to ₹11 crore, down from ₹2,021 crore in the previous year. The company’s sales slipped marginally to ₹12,503 crore from ₹12,747 crore, while total expenses surged to ₹12,549 crore, compared with ₹11,082 crore in FY24.
The sharp squeeze on margins was driven by a rise in input costs, particularly cocoa and dairy derivatives, along with higher employee expenses. Depreciation and finance costs also rose significantly during the year, reflecting increased capital expenditure and borrowing amid tighter financial conditions.
Parle Biscuits, India’s largest biscuit maker by volume, faced similar challenges. The company reported a 7 percent rise in revenue to ₹16,191 crore in FY25, supported by steady volumes across its core glucose and Marie portfolios. Despite this, net profit declined 39 percent to ₹980 crore.
Parle’s operating margins came under strain as prices of wheat, sugar and edible oils remained elevated for most of the year. Additional pressure came from higher packaging, fuel and logistics costs. Operating in one of the most price-sensitive categories in the fast-moving consumer goods market, Parle had limited room to raise prices without risking demand, unlike premium-focused peers.
Industry executives say FY25 highlighted the vulnerability of food companies to sustained commodity inflation. While consumption held up, especially in staples and affordable indulgences, the inability to fully pass on costs meant earnings bore the brunt.
With raw material prices showing mixed trends and competitive intensity remaining high, analysts expect margin recovery to be gradual, dependent on commodity softening and sharper cost controls in the coming quarters.
